Goldplat plc Well placed for a positive FY 2018

Goldplat plc (LON:GDP), the AIM listed gold producer with international recovery operations located in South Africa and Ghana and a mine in Kenya, is pleased to announce an operational update for the three months ended 31 December 2017, being the second quarter in the Company’s financial year (the ‘Quarter’).

Overview

• 8,794 gold equivalent ounces were sold and transferred during the Quarter (quarter ended 31 December 2016: 9,271 ounces).
• Focus at the recovery operations remains on expansion – both in terms of increasing operational capacity and strengthening sourcing supply.
• Production at Kilimapesa was adversely affected by various disruptions related to the election process. Production has returned to planned levels during January 2018 and forecast production for the year remains unchanged at around 5,800 ounces.

*the H1 sales number includes Goldplat Recovery gold sales of 7,781 oz for the first quarter. The Company’s announcement of 24 October 2017 incorrectly stated this amount as 9,170.oz (285kg).

Goldplat Recovery (Pty) Ltd (‘GPL’), South Africa

• During the Quarter GPL produced 6,380 ounces of gold and gold equivalents with 3,639 ounces of gold sold for own account and 1,568 ounces transferred to clients.
• Sourcing remains a primary area of focus and large quantities of high grade material were sourced during the Quarter, particularly for the by-product circuits.
• GPL was appointed to clean-up a decommissioned gold operation for a large South African gold mining producer. This project is expected to be completed by the end of FY 2018.
• The gold content of our current raw material stock now exceeds 1,000 kg (in excess of 32,000 oz) of gold for the first time since 2013, highlighting the focus and energy the sourcing team has put into finding the right materials for the operation.
• Metallurgical testwork to improve recoveries from the large stockpile sourced during the previous quarter for processing through the underground carbon-in-leach (‘CIL’) circuit continues.
• Progress in securing the West 3 Pit for final tailings deposition (which will allow re-processing of the stock dam to begin) has been slow during the Quarter with the Department of Mineral Resources and the current owners of the pit working on legal requirements for reclassification of the status of the pit – whilst this process is outside of GPL’s control, Goldplat continues to engage with both parties.
• During the latter part of the Quarter, GPL started the refurbishment and configuration of GPL’s flotation circuit to allow the pilot plant test work programme for the ~80,000oz Au Tailings Storage Facility material to commence – first results are expected in Q3 FY 2018.
• During the Quarter terms of a settlement of the dispute between GPL and Rand Refinery were agreed and a Memorandum of Understanding (‘MOU’) was signed by the two parties early in January 2018 (see announcement of 12 January 2018). The MOU contains terms agreed to for inclusion in a Settlement Agreement, including agreement on an undisclosed amount to be paid by Rand Refinery to GPL in full and final settlement of the dispute. The Settlement agreement is being completed by the respective legal teams and is expected to be concluded early in February 2018.

Goldplat Recovery Ghana (‘GRG’), Ghana

• GRG produced 2,408 ounces of gold and gold equivalents during the Quarter, with 2,089 ounces of gold being sold for its own account. Although this production is lower than that for the corresponding period in the previous year, it is in line with the year-plan.
• Commissioning of the elution plant began during the Quarter as planned and is ongoing. Final completion of the ancillary infrastructure is expected by the end of February 2018 with the first gold pour and official opening of the plant planned for March 2018.
• Good progress has been made during the Quarter with sourcing of material from outside Ghana, including shipments from West Africa and elsewhere in Africa as well as South America. Regular and sustainable shipments are now being received from three different South American producers.
• A second-hand Fluidised Bed Incinerator has arrived in Tema. The unit is intended mainly for the treatment of lower grade materials being sourced from South America, and once installed will increase incinerator throughput by circa 33%.
• The pilot plant for testing and reprocessing artisanal material, as discussed with the government, was delivered to Ghana during the Quarter. Government subsequently decided to delay the project pending formalisation of a coordinated programme of the artisanal tailings clean-up and the simultaneous rehabilitation of land in the test area. A steering committee has been set up to manage these efforts and a GRG Board member is a member of this committee.

Kilimapesa Gold (‘KPG’), Kenya

• KPG produced 1,234 ounces of gold and gold equivalents, with 1,498 ounces of gold sold for own account during the Quarter.
• KPG had a slightly disappointing quarter, mainly due to lost production as a result of disruption to diesel supplies (resulting from election-related political unrest) as well as problems relating to the importing of critical parts for the primary crusher. The crusher issue has subsequently been resolved.
• A second diesel generator was installed at the new Plant 2, to provide additional power for the mill to increase the overall production throughput.
• KPG remains on target to produce 5,800 oz of gold in FY 2018, despite the previous quarter’s loss in production.

Anumso Gold Project (‘Anumso’)

• On 16 January 2018 it was agreed to extend the Vesting Date of the Initial Option period by six months to 31 October 2018 (refer to announcement of the Modification of the option terms made on 16 January 2018 and the announcement of the Anumso Gold Project Earn-in Option Agreement made on 15 September 2016).
• During the Quarter Ashanti Gold Corp announced metallurgical test work results, which demonstrated encouraging recoveries. The soil sampling on the project continues and extensive trenching is planned to begin in February 2018.

Gerard Kisbey-Green, CEO of Goldplat, commented: “I believe we are well placed for a positive FY 2018. Management is committed to achieving profitability at Kilimapesa during this financial year and I am confident that we will succeed. Furthermore, we continue to make positive progress at our recovery operations, both in terms of increasing operational capacity and in identifying new sources of material for processing at an international level.

“In South Africa, I believe that the MOU signed with Rand Refinery is very positive as it will allow Goldplat and GPL to focus management time on the business rather than on legal matters, whilst also renewing a business relationship with Rand Refinery that is beneficial to both parties. I also believe that the election of Cyril Ramaphosa is good news, which is significant in terms of the risk profile of the Company in light of Goldplat’s exposure to South Africa. We look forward to keeping shareholders updated on all of our growth initiatives in due course.”